Families and children

Sweden’s support for parents with children is comprehensive and effective but expensive

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Sweden must ensure that it meets its goals for reconciling work and family life at the lowest cost, while still consistent with providing the quality of service that Swedish citizens expect.

Swedish policy provides support for parents of children of all ages. Generous paid parental leave reduced working hours for parents with young children are followed-up with high quality childcare and extensive out-of-school-hours care at a low price to Swedish families (on average the parental fee amounts to only 11% of the cost of a childcare place, the lowest fees in OECD countries). These policies are expensive: public spending on parental leave costs 0.8% of GDP and formal day-care 2% of GDP, contributing to a tax-to-GDP ratio of over 50%, one of the highest in the OECD.

To ensure the long-term financial sustainability of this comprehensive system, it is desirable to maintain a role for good quality family-day care and avoid significant increases in spending on parental leave.

The comprehensive support for Swedish parents trying to reconcile their work and family commitments contributes to some impressive outcomes: 73% of women work – only 3 percentage points below male employment rates; 97% of households with children have someone in work; more than 70% of the mothers with children and 80% of sole mothers have jobs. Such outcomes are helped by the fact that 85% of 2-year olds use formal childcare and many Swedish mothers reduce their working hours when children are young. Such high maternal employment rates keep child poverty rates very low – at just 4%. Overall fertility rates have held up comparatively well. However, Sweden needs to address gender equity issues. There is strong gender segregation in public service employment (health, education, and childcare); women rather than men reduce working hours after childbirth, and long periods of leave (or reduced working hours) do not help female career progression. As a result, pay differences remain significant, and are not narrowing. Among the top 20% of male and female earners, the gender wage gap is 19% in Sweden compared to the OECD average of 16%, and there are proportionally fewer women in management positions in Sweden than in Canada.

Based on its review, the OECD’s Babies and Bosses report suggests the following policy recommendations to improve the balance of work and family life in Sweden:

To contribute to the long-term financial viability of the childcare system, maintain where possible, the role of family day-care services, as such services are less costly than centre-based care services.

Take measures aimed at reducing the differences in the use of parental leave between men and women by, for example, granting a bonus to parents who equally share parental leave entitlements, increasing the duration of leave periods that are non-transferable between the parents, and/or increasing information to both parents about fathers’ rights to parental leave.

To give employers due notice on the return of their employees, consider increasing the notice period for parents on parental leave to approximately two months.